Economy and Business
Economy and Business
Executive Summary 5
Economic Snapshot 7
The State Economy 9
Social infrastructure 11
Access infrastructure 11
Industrial infrastructure 12
State Policy 15
Vision & Mission 15
Industrial policy 15
IT policy 15
Infrastructure policy 16
Biotech policy 16
Power policy 16
Business Opportunities 19
Key industries 20
Potential hubs for investment 23
Key Players 25
Doing Business in Uttar Pradesh 29
Indicative list of approvals and clearances 29
Cost of setting up business 31
Contact for information 32
A report by KPMG for IBEF
UTTAR PRADESH PAGE 5
Uttar Pradesh (UP) is situated in northern part Economic Zones (SEZs) are under implementation.
of India and is surrounded by Bihar in the east, Centre for Monitoring Indian Economy (CMIE) index
Madhya Pradesh in the south, Rajasthan, Delhi, of Relative Development of Infrastructure of the state
Himachal Pradesh and Haryana in the west and (2002-03) is at 103.3 against an all India figure of 100.
Uttaranchal in the north.The state has a population
of 166 million. The state has a well-developed agro-based industry.
Being one of the largest producers of sugar cane,
The state has the longest network of rivers and the state is India’s sugar bowl. UP accounts for
canals at 28,500 km fostering the agriculture sector. 28.03 per cent of India’s sugar production.The
The mineral resources in the state are mainly affluence of agriculture spurred the growth of allied
limestone, dolomite, glass-sand, marble, bauxite, industries like cold storages and warehousing.
non-plastic fireclay and uranium. In addition to industrial areas, many centres like
Kanpur, Ghaziabad and Lucknow have an established
Endowed with fertile land, salubrious-climate and traditional industry.The large livestock population
perennial river systems, the state has long been, the allowed the leather industry to flourish in the state.
granary of India. Agriculture is the major source Kanpur and Agra emerged as the hubs for leather
of income for about 72 per cent of the population. goods in the country.Textile industry is the other
The state is one of the leading producers of food promising sector in the state.
grains and other commercial crops in the country.
The state has a well-developed traditional industry Uttar Pradesh is the largest producer of electronic
besides mineral based industry. UP is now flexing its goods and is the fourth largest exporter of software
status as the leading agricultural state in the country products from the country. UP accounted for close
to emerge as a preferred destination to 10 per cent of IT & BPO exports from the
for the food-processing industry in the country. country in 2003-04.With a productive and cost-
effective manpower, the state has attracted some
The state has some of the oldest powerhouses and of the largest MNCs to set-up their manufacturing
currently is one of the largest power producers in the facilities – Coca-Cola, Pepsi, Glaxo, Daewoo, Honda,
country.The state has good communication network and Piaggio to name a few.
including one of the longest rail and road lengths.The
state is keen to improve the industrial infrastructure The state with its human resource potential, proactive
and has developed integrated industrial townships like policies and commitment to ensure encouraging
Noida with state-of-the-art facilities. Noida export climate to the investors is poised to emerge
zone enjoyed a good inflow of investment from many as a manufacturing hub in the country.The state
domestic and international players.The state has has become a hub for corporate R&D with many
established four agro export zones and three Special domestic players and MNCs establishing their facilities.
Industrial Centres in Uttar Pradesh
UTTAR PRADESH PAGE 7
An Economic Snapshot
Area (sq km) 240,928
Population (2001, million) 166.2
Literacy Rate (%) 56.27
Net State Domestic Product 36.26
(NSDP) (2002-03, US$ billion)
Per Capita NSDP (US$) 210.53
National Highway Length (km) 3728
Rail Length (km) 5440
International Airport (nearest) Mumbai
Domestic airports Lucknow,Varanasi, Kanpur
Key industries Cement
Glassware & Bangles
Industry with growth potential Biotech
Advantage Uttar Pradesh
Largest population in the country
Longest river network, longest rail length and ranks second in road length
Ranks second in total number of sugar mills
Highest number of domestic tourists in the country
Largest exporter of electronics and software services totalling
to US$ 899 million in 2003-04
Ranks fourth in software exports
UTTAR PRADESH PAGE 9
The State Economy
Uttar Pradesh is the second biggest state economy It is the largest producer of wheat, pulses,
in the country, with a share of 10.7 per cent sugarcane, tobacco, potato and milk in the country.
in aggregate domestic product. Area-wise it is the It also has the highest yield in the country of pulses
fourth largest state in the country.The state recorded and tobacco.
a growth of 4.5 per cent during 1993-94 to 2003-04.
The state has a well-developed agro-based and food
Uttar Pradesh - Sectoral Contribution to GDP processing industry.The total investment in the food
processing industry is expected to be more than
US$ 42.55 million in 2004-05.The state is one of the
leading producers of dairy and horticulture.The state,
better known as the sugar bowl of the country is one
32% of the largest producers of sugar cane.The state
42% recorded total production of 5.4 million tonnes
of sugar in 2001-02.The state ranks second
in total number of sugar factories in the country
26% at 101 in 2002-03.
The availability of good natural resources and
abundant manpower spurred the growth of the
industry in the state. About 389,000 Small Scale
Industries1 like hand-knitted woollen carpets,
Industry Source: Government of Uttar Pradesh, 2003-04 woodcarving, brass metal industries, terracotta, etc.
provide large employment opportunities.
Among the major states, Uttar Pradesh ranks
fourteenth in per capita income. Uttar Pradesh Industrial index in 2001 (with 1996-97 base)
is the most populous state in India, with more than
16 per cent of India's total population.The western 223.0
region is more urbanised than the rest of the state 169.1 175.9 179.0
and has 622 industrial workers per thousand 129.1 127.9
in registered factories, against 443 in the state.
The density of population in the western region
is 762 per thousand against 689 in the state.
Metal and alloys Industries
Agriculture is the primary sector of the state’s
economy, employing about 72 per cent of the total
work force.The share of agriculture in the total
income of the state is 33 per cent. Uttar Pradesh Source: Economic and Statistics
produces 38 per cent of India’s wheat, 20 per cent Division Diary year 2001
of paddy and 21 per cent of sugarcane.The state
boasts of the highest irrigation intensity at 66 per cent. 1
(As on 31st March 2002)
Three most important industries in the state are The services sector is the key emerging sector
sugar, cotton fabrics and diversified food preparations. in the state. Uttar Pradesh emerged as a hub
The state has fifth highest share in the country for IT companies and ranks fourth in terms
in manufacturing value added of nearly 7 per cent. of software exports. Several MNCs have established
The state witnessed a growth of 42 per cent their facilities in Noida industrial area, which
in cement output in 2003-04. is in close proximity to the national capital.
Tourism is one of the promising sectors in the
At 13,645, UP is in the top quartile in the total state.With a range of pilgrimages, the state is the
number of factories in the country.The electronics, favourite destination for the domestic tourists.
leather, textiles and mineral-based industries have The state enjoys the highest domestic tourist
shown a promising growth over the years. visits in the country.
UTTAR PRADESH PAGE 11
Social infrastructure cost for the UP state roads project is estimated
at approximately US$ 614 million.
Uttar Pradesh is one of the leading states in the
number of institutions including 16 general Power
universities, 3 technical universities and a large Uttar Pradesh is the fourth largest producer
number of polytechnics, engineering institutes and of power in the country at 7,600 MW2 with about
industrial training institutes. The state has several 88 per cent of it being thermal.The state is the
reputed educational institutions like IIT Kanpur, third largest producer of thermal power in the
IIM Lucknow, Allahabad University, Aligarh Muslim country.The state is one among the few in the
University, Banaras Hindu University and Roorkee country to actively encourage private participation
Engineering University (recently ranked the fourth in power sector.The state has signed Power Purchase
best university in Asia). Some of the research Agreements (PPAs) for nearly 2,500 MW of private
organisations in the state include Central Drug power. Most of these projects have a tie-up with the
Research Institute, Industrial Technology Research major power companies of the USA, Canada, UK and
Centre, Central Food Technology Research Institute, Germany.The state signed a PPA with the National
National Botanical Research Institute, Glass Research Thermal Power Corporation, with the aim of making
Institute, Sanjay Gandhi Post Graduate Institute UP a power surplus state3. Reliance Industries has
of Medicine and King George Medical College. planned to invest around US$ 2 billion in the power
sector in the state4.
The state has a good network of hospitals and
has the highest number of health care centres Break-up of power generation in Uttar Pradesh
in the country.
Access infrastructure 10.9%
Uttar Pradesh has the longest rail length, the second
longest road length, and highest number of post
offices in India ensuring good connectivity. UP has 87.3%
over 4,800 km of national highways and over
10,000 km of state highways.The state runs multiple
agencies involved in the construction and
maintenance of road network with the Public
Works Department (PWD) being the nodal agency.
The state government is going to take up the Nuclear
Source: Annual Report 2002-03, Ministry of
upgradation of 973 km of important state highways Hydro Power, Government of India
and major district roads along with major
maintenance and rehabilitation of another 2,574 km. 2
As on 31.01.2003
In addition, the PWD will construct four bypasses 3
by the year 2003
totalling 20 km and 5 major bridges.The total project 4
Industrial infrastructure water, uninterrupted power facility etc., the state
is keen to improve the domestic infrastructure. Noida
Uttar Pradesh established 205 export oriented units5 is popular with big names looking for land in the city
till 2002.The state has an Export Promotion Zone to set up facilities,Wipro, Xansa, Adobe to name
at Noida and two others at Moradabad and Kanpur a few.To remove the infrastructure drawbacks
are under implementation.The state has four Agro of Noida, an airport is being planned as also a host
Export Zones fostering better exports of agricultural of flyovers and expressways.
products.Three Special Economic Zones6 have
been proposed. Facilities provided:
Connectivity: Noida is provided with good
Uttar Pradesh has 129 industrial areas and ranks third quality roads connecting it to all the major
in the number of industrial parks at 89, extending destinations in the country.
over a total area of 38,000 acres.The state has Power: Uninterrupted quality power supply with
developed integrated industrial areas, Noida and 40 MVA surplus power is available at 220/132 KVA.
Greater Noida in close proximity to New Delhi with Water: Potable water with per capita availability
state-of-the-art industrial and domestic infrastructure. of 225 litres.
Telecom: 33,000 lines on digital electronic
Noida exchange 10,000 lines as EWSD German Switching
Noida, an Integrated Industrial Township of Uttar Technology.
Pradesh was established in 1976 under the UPIADA7. Education: There is one-degree college and
Noida is better known as the state’s IT capital. The 14 Higher Secondary schools. Proposals have
industrial park in Noida has about 4000 functioning been approved to set up engineering and
industrial units with the state-of-art physical medical colleges.
infrastructure.The first offshore Export Processing
Zone in the country and a Software Technology Park 5
100 per cent Export Oriented Units
with its own Earth Station are added assets of Noida. 6
Bhadohi SEZ at Kanpur, Kanpur SEZ and Greater Noida.
In addition to the basic amenities like high bandwidth, 7
Uttar Pradesh Industrial Area Development Act
UTTAR PRADESH PAGE 13
Health: Noida is well-equipped with modern and
advanced medical centres with good facilities. Profits and dividends can be remitted without
Plans for a super speciality hospital are in pipeline. restriction
Units in EPZ exempt from power cuts
Noida export processing zone (NEPZ)
NEPZ established in 1985 by the Government
of India works to promote investment and exports. Greater Noida
it provides the following facilities: Greater Noida, an industrial township near New
Delhi and in the immediate proximity of Noida
Corporate tax holiday for consecutive 5 years is one of the largest industrial townships in Asia8.
in the first eight years of establishment The township has been proposed to constitute
Duty exempt on inputs and capital goods state-of-art facilities with world-class standards.
Special import licenses for the import The state is proactive in encouraging private sector
of consumer goods participation in the development.The power
25 per cent of the total production, 5 per cent distribution has been privatised ensuring high quality
rejects can be sold in domestic tariff area (DTA) uninterrupted supply to the industrial units.The
units under EPZ scheme township is provided with good water facility and
50 per cent of agro production is permitted educational facility including primary schools,
for sale university and R&D institutions.
DTA unit can apply for conversion to an Export
Oriented Unit (EOU)
100 per cent of export earnings at market rate can
be converted; no restriction on foreign share
Developed by Greater Noida Industrial Development Authority
UTTAR PRADESH PAGE 15
Vision & Mission in inviting private sector participation in the
infrastructure development. Certain areas
The state government of UP has laid thrust on the to be developed as Industrial Corridors are:
following key areas:
Create facilitative administrative systems Noida-Greater Noida-Ghaziabad-Gautam
Reduce lead time in setting up of industries Buddha Nagar
Remove bureaucratic hindrances Meerut-Moradabad-Bareilly
Provide internationally competitive infrastructure Agra-Aligarh-Firozabad-Khurja (Bulandshahr)-
Unfetter industries in the conduct Kosi (Mathura)
of their business Lucknow-Kanpur
Industrial policy IT policy
Incentives for investment The state government announced the UP IT Policy
Subsidy of 20 per cent of fixed capital investment in 2004.The government aims at increasing the
for new units in most backward areas penetration of internet in the state supported with
Subsidy of 15 per cent of fixed capital investment high-speed telecom backup.The state has committed
for new units in less backward areas to improve IT infrastructure by developing electronic
Subsidy of 10 per cent of fixed capital investment cities and gateways to global destinations. Special
for new units in least backward areas incentives have been offered to the investors ensuring
Deferment of luxury tax in thrust areas supportive climate.
for 5 years
Octroi rebate on plant, machinery and building The state government also plans to rope in the
material for new units for 5 years Software Technology Parks of India (STPI) to set
Exemption from minimum power demand up software technology parks at Noida, Agra,
charges for sick units during the closure period Kanpur and Allahabad. The government is also trying
Land at 20 per cent of market prices for partner with the Indian Institute of Technonlogy
starred hotels (IIT), Kanpur, Indian Institute of Management (IIM),
Special incentives, including electricity, equity Lucknow and Indian Institute of Information
participation, and other assistance, for Technology (IIT), Allahabad for developing the
NRI entrepreneurs Kanpur-Lucknow corridor as a cyber corridor
in the state.
Uttar Pradesh is among the five states in the country The state government has announced plans
which have enacted their special economic zone to establish backbone network or the UP-wide
(SEZ) legislations. Area Network (UPNET) for voice, data and video
transmission and dissemination. UPNET will extend
The state plans to develop industrial areas to all government departments, state secretariat,
as Integrated Industrial Townships on the lines division and districts.To spread awareness of IT
of Noida and Greater Noida.The state is active in the state, the Department of Science and Technology
of the UP government and the Council for Science and through use of biotechnology and to generate job
Technology have tied up with NIIT, the leading IT opportunities in this field. Lucknow is home
trainer, to test the IT proficiency of the state’s young to 20 institutions and 22 scientific academic bodies
population. Further, at least one Computer Education with multi-disciplinary specialities in the field
Centre (CEC) will be opened in an intermediate/ of biological sciences. In view of this, Lucknow was
degree college in each block to enhance IT penetration declared as a “Biotechnology City” in 2002, during
in rural areas in next five years. the 89th annual meeting of the Indian Science
Congress. The state also has a large agricultural
Infrastructure policy base to provide raw materials and a large market
for the finished products. The bio-tech park in
Under the road policy, the active role of the private Lucknow will offer start-up and incubation facilities.
sector is encouraged in construction and maintenance The state is planning a much bigger biotechnology
of roads, bridges, over bridges, under passes, park in Noida.
expressways and highways etc. A road fund of nearly
US$ 87 million, set up for the first time by any state Power policy
in India, seeks to upgrade infrastructure facilities
to world-class standards. With a projected investment of over US$ 5.3 billion
in the next 5 years and the largest base of potential
The National Highways Authority of India (NHAI) consumers in India, Uttar Pradesh could emerge as
is upgrading the national highways under the mecca of power sector in the country. UP was
the Golden Quadilateral and East-West-North-South one of the first states to undertake power reforms.
corridor areas in the state. UP’s Public Works New Power Policy of the state has provisions for
Department (PWD) is upgrading 3,500 km of state increasing the plant load factor (PLF) by creating
highways as part of a World Bank aided project. additional power capacity, modernisation of power
The World Bank has approved a US$ 488 million loan stations and improving the transmission system.
to improve the capacity, quality and safety of the
existing state road network.The Uttar Pradesh State Reliance Industries Ltd is planning to build world’s
Roads Project will also enhance the capacity of PWD, largest gas-based power plant involving a total
the state’s main road agency, to manage and deliver investment of US$ 2 billion and generating capacity
quality road services. of 3,500 MW in the state.The state also aims at
electrification of its 40,000 villages by the year 2009.
The state has built an infrastructure development The state plans energy parks in various districts to
fund with a corpus of US$ 42.5 million under the create awareness among the people about alternative
upcoming industrial and service sector investment energy sources.The main state park will be set up
policy, 2004. A hi-tech airport at Saifai with proposed at Allahabad and one such district-level energy park
investment of US$ 9.5 million is to be completed would be established in Lucknow.
within two years.
Uttar Pradesh’s power industry is offering great
Biotech policy opportunities to private sector entrepreneurs.
The major incentives announced in the power
The state government announced the UP Bio-Tech policy are:
policy 2004 that seeks to establish a pre-eminent
position for the state in this sector. The ultimate Subsidy towards land cost and rehabilitation
aim is to bring greater prosperity to the farmers ranging from 40-60 per cent
UTTAR PRADESH PAGE 17
Government land, if available to be given for Entrepreneurs of industries involving investment
99 year’s lease at the rate of US$ 2.13 per acre, of up to US$ 5.5 million, export-oriented units
stamp duty on registration waived of NRIs with investment above US$ 5.4 million and
Deferment of entry tax as well as trade tax for electronic and food industries with investment above
a period of 7-12 years US$ 2.2 million are provided with the single window
Water resources to be made available for thermal registration by Udyog-Bandhu (friend of industry) for
and nuclear power plants all the clearances.
UP has large coal reserves in the form of open cast All 100 per cent export oriented units, which exports
mines in Sonebhadra district. Abundance of water over 50 per cent of production, are declared as public
makes this district an ideal location for thermal utilities to free them from the threat of flash strikes.
power plants.The state government commits power
purchase from new power plants, if other network is The state plans to make the entire tax system
not available. more progressive to ensure greater profitability
for entrepreneurs. Rules, procedures and practices
Governance are being liberalised to bring them at par with
The state introduced a single window registration
system to speed up transactions red tape.
UTTAR PRADESH PAGE 19
There are several factors that affect evolution dependence on availability of natural resources.
of an industry in a particular region.The major The availability of a large livestock population
factors impacting evolution are: spurred the growth of leather industry
in the state.
Policy proactiveness: The policy that a state
government adopts towards a sector directly Capability: Availability of good quality manpower
affects its attractiveness for further investment. is a must for all industries to flourish. Highly
For example, the Uttar Pradesh State Government cost-effective manpower in the state attracted
has given many concessions for the IT sector. many players to establish their manufacturing
This has prompted many IT majors like HCL, facilities.
Cadence to set up software development
operations in the state. Based on an assessment of the above factors,
some of the industries with potential for investment
Availability of natural resources: Certain and growth in Uttar Pradesh are illustrated below:
industries like agro-based industries have a high
Exclusive Policy Food Infrastructure IT & ITES
Special Incentives Processing
Special Infrastructure Mineral-based
(SEZ, STPI, AEZ etc.) Tourism Industry
Generic policy incentives
Sector Attractiveness Drivers
Natural Resources Capability
This is a qualitative assessment to highlight relative attractiveness of different sectors.
A case by case analysis is necessary before investment is made.
Source: KPMG Analysis
Key industries of which Kanpur and Agra are the two famous
production centres. Agra is the biggest centre
Agro-based and Food processing for shoe manufacturing in the country.
The total sales in food and beverages sector
in the state accounted for 24 per cent of the sales Kanpur is the sole producer of saddlery products.
by industries in 2003. It is a prominent centre for leather processing.
Kanpur tanneries specialise in processing hides into
Production of major crops and alcohol
(as a percentage of total) heavy leather (sole, harness and industrial leather).
38.5 Uttar Pradesh plans to develop a special economic
zone at Kanpur to cater to the leather goods
industry. In addition to traditional centres for leather
and leather products in the state, Noida has emerged
as a major centre especially for leather footwear and
Sugar Potato Alcohol Wheat Food Milk With 196 units, the sector has shown a promising
cane stock grains
growth of 205 per cent during 1991 to 2000.
Uttar Pradesh is among the largest producers Largest producer of component electronics
of agricultural commodities in the country. at 19.6 per cent of India’s total
It produces 34 per cent of the total groundnut, With a share of 24 per cent the state ranks
17.5 per cent of rapeseed, 8 per cent of fruits and second in telecom electronics production
14 per cent of vegetables. It has the largest livestock In consumer electronics, the state produces
in the country and its milk production is the highest 22 per cent and ranks second in the country
in the country. It is the largest producer of sugarcane Ranks third in the production of computer
and ranks second in the manufacture of sugar9. components with 14.5 per cent share and
strategic components with 18.8 per cent.
Uttar Pradesh, with its prosperity in the agricultural
sector enabled the growth of allied industry like
warehousing, cold storages and flourmills. At 2,659, Major players like LG Electronics,Videocon and
food product manufacturing sector has the highest others have set up manufacturing facilities
number of factories (19.5 per cent of the total) in the state.
in the state.
Leather Chemical sector is one of the key contributors
Uttar Pradesh has a well-developed leather industry. to the state economy.The state has a developed
The state has one of the largest livestock populations fertiliser industry and the sector ranks third in the
in the country, which provides a strong raw material total number of factories in the state.The chemicals
base required for the industry. sector has shown one of the highest growths
of production at 150 per cent during 1996-2001.
The number of leather and leather products
industries in the state are to the tune of 11,500, 9
Sugarcane 2002-03, Milk,Wheat, Food grain, Maize, Rice: 2001-02,
Potato, Molasses: 2000-01, Alcohol, sugar: 2000.
UTTAR PRADESH PAGE 21
Utar Pradesh is the fourth largest exporter
of software products in the country with exports
amounting to US$ 957 million.
The IT industry is the backbone of state’s economy.
STPI Noida Facility was one of the first STPI centres
to be established as early as 1991. International giants
like HCL, Cadence, CSC among others have their
development facilities in Noida.
Growth of Software exports
1998-99 1999-2000 2000-01 2001-02 2002-03 24.6 per cent of the sales by industries in the state
Source: Government Website
in 2003.The state has a good range of mineral-based
industries.The state ranks third in the production
of non-metallic minor minerals at US$ 203.3 million
Engineering in the country in 2001-02.The availability of good
Total sales in machinery sector accounted for natural resources spurred the growth of the industry
10.5 per cent, transport equipment for 7.7 per cent in the state. Some of the players in the state include
and metal sector for 23.1 per cent of the sales Ambuja cements, Sonabhadra Cement plant and
by industries in the state in 2002.The state has Almorah mini cement plant11.
a well-developed engineering sector with a number
of factories in machinery and metal manufacturing. Textiles
Manufacture of machinery and equipments10 has the Total sales in textiles sector accounted for
largest share in industrial production.The state has 12.3 per cent of the sales by industries in the state
manufacturing units for brassware & lock making in 2003.Textile sector is one of the important
in Moradabad and Aligarh respectively.The basic traditional industries in the state. Uttar Pradesh has
metals and alloys industrial production has shown 58 spinning mills and a total of 74 textile mills in the
a growth of 123 per cent during 1996-2001. Many non-SSI12 sector.The state is known for its carpets
MNCs like Honda,Yamaha, and New Holland Tractors & brassware products.
have their manufacturing presence in the state.
Other than transport equipment
Uranium has been discovered in Southern Lalitpur
Total sales in non-metallic sector accounted for 12
SSI: Small Scale Industry
Tourism Carpet weaving is one of the important crafts in
The state recorded the highest number of domestic Uttar Pradesh. UP produces about 90 per cent of the
tourist visits at 27 per cent of the total visits from country’s carpets in and around Mirzapur, Bhadohi
1997 to 2003. Uttar Pradesh is known for Agra, the and Khamaria.These carpets are popular export
city of the Taj Mahal. Fatehpur Sikri is famous for items today. Hand woven carpets, brassware and
the mausoleum of saint Sheikh Salim Chisti. Uttar leather products form the traditional export items
Pradesh boasts of the beautiful hill stations and from the state.
a large number of temples.
The total investment in the state amount nearly
Uttar Pradesh recorded an export turnover to US$ 14.4 billion of which infrastructure investment
of approximately US$ 425.5 million during 2001-02 constitute US$ 11.45 billion.
and around US$ 531.9 million during 2002-03.
Uttar Pradesh accounts for nearly 6 per cent Uttar Pradesh has successfully attracted a good
of the country’s exports.The state is the fourth number of international players to establish their
largest exporter of software products. facilities in the state.The integrated industrial
townships at Noida and Greater Noida have enjoyed
Estimates of Exports from Uttar Pradesh in 2002-03
good investment climate due to the availability
by Public Companies and CAGR
of state-of- the-art infrastructure.
5 year CAGR (per cent)
Cadence Systems, a software giant has invested about
Estimate of likely invesment in Uttar Pradesh (US$ million)
0 10 20 30 40
Share of Exports from Uttar Pradesh (US$ million)
Machinery 135 124
and Auto Ancilliaries
Source: CMIE Prowess database; size of the
Textiles circle is indicative of the size of the exports
The growth of IT export has been due to rise Source: Projects Today
in exports from the software export houses.
US$ 100 million in its development centre in Noida.
The manufacturing industry in the state has shown Adobe system has made an investment
good export performance especially in the metal of US$ 100 million. General Motors, a leader in the
sector.The machinery exports have shown auto manufacturing, plans to invest in the Daewoo
a promising growth with CAGR of 15 per cent plant to start manufacturing about 100,000 units
during 1998-2003. providing employment to over 2000.
UTTAR PRADESH PAGE 23
Potential hubs for investment facility is instrumental in developing products
for global market.
Uttar Pradesh as R&D and BPO hub
The state has emerged as a hub for R&D institutions ST Micro electronics advanced design centre
in electronics and communications sectors. in Noida, employs over 950 professionals and has
The emergence of Noida as one of the favourite a strong R&D presence in the state. Bharat Petroleum
IT destinations and the availability of good plans to establish its first R&D facility in the state.
infrastructure supported by the state’s proactive Yamaha Motors has established its R&D facility
policies led to the growth of R&D facilities in the state. at its manufacturing plant, which was instrumental
in launching five models of the company.
Cadence Design Systems R&D facility in Noida was
set up in 1987 with strength of 320 engineers.The Uttar Pradesh has leveraged the prowess of its
company has invested about US$ 100 million since IT industry to emerge as the leading ITES-BPO
the commencement of its operations and plans destination in India. BPO companies like EXL and
to expand by adding 300 engineers. HCL Technologies operate from Noida.
Adobe’s state-of-the-art R&D facility at NOIDA, The Adobe Indian team conceptualised and developed the Acrobat
Reader for Palm and Pocket PC.The Indian unit owns some of the key
built with an investment of US$ 10 million, technologies in image and document compression - Adobe Pagemaker 7,
has filed for 10 worldwide patents13.The Indian Adobe Frame Maker and Adobe Photo Deluxe.
UTTAR PRADESH PAGE 25
PROFILE OF KEY PLAYERS IN UTTAR PRADESH
Adobe Systems India Pvt Ltd Computer Sciences Corporation India (CSC)
Adobe India commenced its operations in 1998 Computer Sciences Corporation India, the Indian
to augment engineering resources of the company. arm of the US$ 15 billion Computer Sciences
Currently the company has a headcount of around Corporation, a global IT services player has set up
250. An achievement of the subsidiary was the three centres in Noida and plans to set up another.
release of PageMaker 7.0 from the India campus The company is involved in managing information
in 2001, the first major international desktop technology operations of International Business
product being engineered from India, which had Machines (IBM) and Electronic Data Systems (EDS).
more than a million downloads. The company has The company operates with a gross turnover of over
partnered with many Indian software giants like US$ 50 million and about 1000 professionals.The
TCS and Wipro. The Indian campus has significant company has a SEI-CMM Level 5 rating.
contribution in developing world-class products.
The company has invested US$ 100 million till date Dabur India Ltd
and accounts for more than 20 per cent of Adobe’s Dabur India Ltd is the fourth largest FMCG
annual revenues. company in India with interests in health care,
personal care and food products. Dabur was formed
Birlasoft Ltd by way of amalgamation in 1986. The company has
Birlasoft Ltd, division of the C K Birla Group was several leading brands. Dabur Chyawanprash, a
founded in 1992-93 as a software-consulting firm health tonic, has a market share of 70 per cent and
and was later renamed with the equity participation Hajmola, a digestive tablet, has a share of 88 per
by GE Capital. Birlasoft offers IT services worldwide cent. The company recorded a net turnover
from development centres in the US, India, and of US$ 257 million with a net profit of US$ 28.3
Australia. Birlasoft has 2,000 technical employees. million in 2003.
The company provides applications development and
support services in eCommerce, Data Warehousing, Daewoo Motors
Legacy Systems, QA, CRM, RIMS (Remote Erstwhile Daewoo Motors, one of the leading
Infrastructure Management Service) and ERP. South Korean based manufacturers of cars and
heavy automobiles was taken over by General
Cadence Motors. Daewoo Motors has its manufacturing facility
Established in 1987, Cadence India at Noida, is the in Surajpur near Greater Noida. Daewoo’s car
company’s largest R&D site outside USA. Cadence manufacturing unit is expected to generate
India is a pure R&D centre with investment to the employment for over 100,000 persons, besides
tune of US$ 100 million till date, which accounts providing revenue of nearly US$ 450 million over
for about 20.5 per cent of its annual revenues. the next five years.
Cadence Design Systems plans to expand its R&D
facility at Noida by adding 300 engineers to its Delphi Automotive System
existing 300-plus staff. Prominent among the products Delphi is a global supplier to every major Original
developed here are Checkplus, the interactive design Equipment Manufacturer (OEM) in the automotive
rule-checking tool, libraries for system design, and sector. Delphi India operates as a wholly owned
VHDL simulation tools. subsidiary of Delphi Automotive Systems Private Ltd
and was founded in 1995.The company has two
manufacturing facilities in Noida. Delphi India exports HCL Technologies
its supplies to the European OEM market. Headquartered in Noida, HCLT is the fifth largest
exporter of software from the country currently
EXL Service Holdings Inc operating with a workforce of 2,500. HCLT has
EXL Service Holdings Inc. offers comprehensive witnessed significant growth in the past few years.
business process outsourcing services and was HCLT partners with 370 prestigious organisations
established in 1999. With three of the four in the world.The HCL Technologies’ BPO has bagged
state-of-the-art facilities in Noida, the company an ISO 9001:2000 and Purdue Benchmark.
started with a headcount of 147. Currently the
service employs over 2,700 people providing Honda SIEL Cars India Ltd
services for global multi-clients with a capacity Honda Motors established the company in India
of 7,500 workstations on a three-shift basis. in 1997, with the collaboration of SIEL group.The
Nasscom, in its 2002 survey, named EXL the company currently manufactures three models Honda
leading BPO service provider in India. city, Honda accord and Honda CR-V with variants.
The manufacturing facility located in Noida has
Goodlass Nerolac Paints Ltd (GNPL) a capacity of 30,000 units a year and employs around
Goodlass Nerolac Paints Ltd, the Indian subsidiary 1,350.The company plans to invest about
of Japan based Kansai Paint Co. Ltd, is the second US$ 177 million in the Honda CR-V project.
largest paint company in India with presence
in decorative paints as well as industrial paints Indo Gulf Fertilisers Ltd
& marine paints, enamels etc. It is the market leader Indo Gulf Fertilisers Ltd, an Aditya Birla Group
in the industrial paints segment.The company has company, is among the largest and most cost-efficient
a strong presence in automotive paints accounting private sector fertiliser companies in India.
for 45 per cent of the organised industrial paint Strategically located in the heart of the Indo-Gangetic
segment during the fiscal 2003 with a manufacturing plain in Uttar Pradesh, Indo Gulf manufactures and
plant at Jainpur, Kanpur Dehat.The company operates markets urea, a nitrogenous fertiliser.The company
with net sales of US$ 164 million. enjoys a leadership position in the nitrogenous
fertiliser sector, with its strong brand of “Shaktiman”
UTTAR PRADESH PAGE 27
urea, supported by a strong distribution and customer 2003-04 is recorded at 3.5 million tonnes recording
service network. Its marketing areas include Uttar a growth of about 40 per cent.
Pradesh, Bihar, Jharkhand and West Bengal, which
together account for over 40 per cent of the total LG Electronics India Ltd (LGEIL)
urea consumption in the country. LG Electronics India Ltd established in 1997,
is a wholly owned subsidiary of LG Electronics,
Ingersoll-Rand India Ltd (IRIL) South Korea. It is one of the leading companies
Ingersoll-Rand India Ltd was established in India in consumer electronics, home appliance and
in 1926 with interests in fields of air solutions and computer peripherals in India. Headquartered
infrastructure.The company’s products were mainly in Noida, Uttar Pradesh, LGEIL operates out
supplied from IR facilities in the United States until of 30 locations across India. LG is a market leader
the Naroda plant was built in 1965. Ingersoll-Rand in various segments like Colour TVs, microwave
Wadco Tools Pvt Ltd is a 74:26 (IR:Wadco Group) ovens, frost-free refrigerators, washing machines and
joint venture with manufacturing facilities air-conditioners with market shares of 16.4 per cent,
at Ghaziabad (near New Delhi).The company 35 per cent, 32.9 per cent, 24.1 per cent and
manufactures pneumatic tools, air motors, lube 34 per cent respectively. It has a turnover of almost
pumps, and fastener tightening and ergonomic US$ 1000 million in India. LGEIL’s sales are increasing
handling systems for IRIL’s industrial solutions sector. with a CAGR of 40 per cent over the past five years.
The Ingersoll-Rand operates with total turnover
of over US$ 90 million. LML Scooters
LML Scooters Ltd is the second largest manufacturer
Jaypee Group of two wheelers.The company was incorporated
The Jaypee Group is a well-diversified infrastructure in 1972 in Panki Industrial Estate, Kanpur.The
industrial group of India with a turnover of over company claims a 30 per cent market share
US$ 650 million and employs a total workforce in volume terms with its popular scooter brand
of over 25000.The group commenced its operations “Supremo”. It made net sales of US$ 190 million
in 1972 and has interests in civil engineering, private during 2003-04.The company is working towards
hydropower, cement, design consultancy, information setting up five training schools in different parts
technology and hospitality. Cement production in of the country to train mechanics and service
personnel.The company plans to establish assembly of 3 wheelers. In the fiscal 2004, the company
plants in Egypt and Columbia by 2006.The company recorded a turnover of US$ 26.3 million.
is planning to convert half its scooter manufacturing
capacity of half a million units per year ST Microelectronics (STM)
to manufacture motorcycles. ST Microelectronics was established in 1987 under
the name SGS-Thomson’s and later changed to STM.
New Holland Tractors Pvt Ltd The company is involved in designing integrated
New Holland Tractors is a wholly owned subsidiary circuits chips in India since 1992 at its Noida facility,
of the New Holland Machine Company, U.S.A and the company’s largest design centre outside Europe.
is a leading player in the local tractor market.The The facility has a workforce of around 1,000 and
company has a manufacturing facility in Greater plans to increase it to 1500, which makes it the
Noida with a production capacity of about 1,000 per largest outside the U.S.The company invested about
annum.The company currently has 10 per cent US$ 21.5 million in R&D in 2002.The Central
market share with revenues of about US$ 100 million. Research and Development team in Noida has been
The company adopted innovative procedures a major contributor in the development of the new
to reduce energy losses and currently operates with 90 nanometres CMOS (0.09 micron) design platform.
35 per cent less energy with no human intervention.
Yamaha India Ltd (YML)
Scooters India Ltd Yamaha India Ltd had its presence in India for two
Incorporated in 1972, Scooters India Ltd is an decades as a technology provider and later became
ISO 9001:2000 and ISO 14001 Company, situated a 100 per cent subsidiary of Yamaha Motor Company,
in Lucknow, Uttar Pradesh. In 1975, company started Japan in 2001. R&D division of the company involves
its commercial production of scooters under the model conception, designing, aesthetics, clay making,
brand name of Vijai Super for domestic market and and proto-type development.YML’s manufacturing
Lambretta for overseas market with the machinery facilities comprise a state-of-the-art plant
from Italy. However, in 1997, the company at Surajpur producing 10 models.The company
discontinued its two-wheeler production and follows 5-S and TPM in its manufacturing processes.
concentrated only on manufacturing and marketing
UTTAR PRADESH PAGE 29
DOING BUSINESS IN UTTAR PRADESH
An indicative list of approvals with timeframes for setting up business in Uttar Pradesh
List of approvals and Departments Estimated time
clearances required to be consulted taken (in days)
Issuance of provisional registration Directorate of Industries Same Day/Instant
(including NOC14 for 220 types of non
Permanent of registration of SSI Directorate of Industries 30 days
Sanction of power load for Uttar Pradesh State Electricity
construction Board (UPSEB) 30 days
Sanction of power load for production UPSEB 30 days
NOC for 29 highly polluting type of Uttar Pradesh Pollution Control 120 days
industries Board (UPPCB)
NOC for industries other than above UPPCB 30 days
29 and the list of 220 non polluting
Grant of Consent to 29 types of highly UPPCB 120 days
Grant of Consent to low polluting UPPCB 30 days
medium and small scale industries
Temporary registration of trade tax Trade Tax Department 3 days
Permanent registration of trade tax Trade Tax Department 30 days
Inspection report for Trade Tax Trade Tax Department 30 days
Decision at Commissioner’s level after Trade Tax Department 30 days
submission of Inspection report for
Trade Tax exemption/deferment
NOC: No Objection Certificate
SSI: Small Scale Industry
List of approvals and Departments Estimated time
clearances required to be consulted taken (in days)
Approval prior to construction of Labour Department 30 days
factory building/ use as a factory for
Approval prior to construction of factory Labour Department 60 days
building/ use as a factory for hazardous
and major hazardous industries
NOC on Fire Safety from Fire Officer Fire Department 30 days
Declaration of land as non agricultural Revenue Department 30 days
Proceedings under section 154 of UP Revenue Department 15 days
Zamindari Abolition Act
Grant of License Food Department 10 days
Permission/NOC from District Food Department 30 days
Magistrate’s level for storage of HSD
NOC for grant of license Drug Controller 30 days
Drug License Drug Controller 30 days
Allotment assurance from State Excise Department 30 days
State Excise Dept.
Excise License State Excise Department 30 days
NOC from Divisional Forest Officer Forest Department 60 days
NOC for Electrical Safety Electrical Safety Directorate 60 days
Permission under Urban Land Ceiling Act Nodia Authority 60 days
Building Map approval Local / Municipal Developmental 30 days
UTTAR PRADESH PAGE 31
Cost of business
Given below is the estimated cost of setting
up business in Uttar Pradesh:
Land (US$ / hectare)16 373,416
Labour Cost (US$ / man year)17 1,573
Occupation Costs 18.4
(US$ / sq ft / year)
Employee Cost (US$ / man year)18
Software Developers 6,383
Team Leads 14,893
Project Managers 31,915
Cost of capital 10.57
(Prime lending rate, per cent)19
Electricity (US cents / kWh)20
Metropolitan Area 9.2
Non Metro Area 9.88
Sales Tax exemptions: Exemption / deferment
of sales tax at rates ranging from 100 per cent
to 125 per cent of fixed capital investment
up to 8 years21.
Land cost has been estimated by computing the average cost
of land at various Industrial Parks in Uttar Pradesh
KPMG Analysis on costing for an IT venture in India
Estimated by computing the average Prime Lending Rates
of prominent public sector, private sector and foreign banks in India
UP Trade Tax Department: http://upgov.up.nic.in/tradetax/default.html
Note: Exchange rate used is INR 47 per US$
Contact for information State Mineral Development Corporation Ltd
State Government Website State Mineral Development Corporation Ltd was
www.upgov.nic.in established in 1974 to provide an impetus to the
development of mineral resources.The agency
Department of Industry Website primarily focuses on scientific development and
www.upgov.nic.in/industry management of the mineral and sub-mineral
resources, refinement of the minerals in association
Uttar Pradesh Industrial Development Corporation with the State Ministry of Geological and Mineral
(UPSIDC) Survey of the State and to provide encouragement
Uttar Pradesh Industrial Development Corporation to mineral-based industries in the state.
is an agency under the state government for
developing industries and industrial infrastructure Indian Industries Association (IIA)
in the state. UPSIDC is India’s premier industrial Indian Industries Association is apex association
promotion and infrastructure development of Small and Medium Scale Industries in Uttar Pradesh.
undertaking, dedicated to industrial development The association with 2500 strong membership covers
in Uttar Pradesh.The agency is equipped with highly wide range of products and services and is spread
professionalized services, single window clearance in different regions of the state.The association has
system and incentives. many local subsidiaries taking care of the interests
Web www.upsidc.com of different regions like Kanpur, Muzzaffarnagar
and Saharanpur etc.
New Okhla Industrial Development Authority Web www.iia-india.org
New Okhla Industrial Development Authority Information on markets and opportunities for
is a development authority instrumental in investment in Uttar Pradesh can also be obtained
development of one of the Asia’s largest integrated from Confederation of Indian Industry (CII), which
industrial township in the proximity of New Delhi. works with the objective of creating a symbiotic
The industrial township has state-of-the-art facilities interface between industry, government, research
for industrial as well as domestic purposes. bodies and domestic and international investors.
The authority was founded 25 years ago and
is in continuous support to the industry. Confederation of Indian Industry (CII)
Web www.noidaauthorityonline.com C/o Jubilant Organosys Ltd
Plot No.: 1 - A, Sector: 16 - A
Greater Noida Industrial Development Authority Institutional Area
Constituted in January 1991, Greater Noida Industrial Noida-201301
Development Authority is constructing a model INDIA
integrated industrial township in the close vicinity Tel 0120-2517325 / 2594838-40
of the National Capital Territory of Delhi and in the Fax 0120-2517327
immediate proximity of Noida, which is one of the Email firstname.lastname@example.org
largest industrial townships of Asia.The industrial Web www.ciionline.org
township is proposed to have infrastructure
at international standards.
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